State Bank of India has stopped accepting new mortgage business in the UK indefinately after being overwhelmed with applications.
SBI launched a buy-to-let range in the UK mortgage market in September 2011.
The bank says it expects to begin offering buy-to-let deals again shortly but Money Marketing understands lending is likely to be halted for a minimum of four months.
Earlier this month, the bank said it hoped to launch more buy-to-let products up to 65 per cent LTV for interest-only and 70 per cent LTV for repayment deals.
It had planned to launch into the residential mortgage market via brokers in August but the move has also been indefinitely delayed.
A State Bank of India UK spokeswoman says: “We currently have a large number of applications in our pipeline and are reviewing and enhancing our offering and internal processes, and therefore are processing existing applications only.”
Largemortgageloans.com director Ian Gray says: “I am surprised as last month the bank was expanding its lending. This will create a hole in the market because it was very good at large buy-to-let loans and would accept applications from companies.”
Mortgages for Business managing director David Whittaker says: “The market would welcome a new lender that comes in, tests itself and adjusts. But a lender that comes in and promises the world to too many people without having the necessary support systems and staff in place must expect to have to depart with egg on its face.”